OSLO, Sept 23 (Reuters) - Norway's Yara and
Chicago-based CF Industries are in talks about a merger
of equals that would create a $27.5 billion global fertilizer
producer to rival world No.1 Potash Corp in an
oversupplied and fragmented market.

The deal would give Yara, the world's biggest nitrate
fertiliser maker, major production units in the United States,
where costs are lower due to cheap gas. CF Industries would gain
a global footprint through Yara's presence in 150 countries with
production assets and a well established distribution network.

The two firms' combined market capitalisation of $27.5
billion would put it almost on par with Canada's Potash Corp of
Saskatchewan, the world' largest fertilizer firm worth $28.9
billion.

The firms said in separate filings that the talks were at an
early stage, and there were no assurances that these would
result in any transaction.

Yara said it had been forced to go public because
information about the talks were at a risk of a leak. It wanted
to conclude the process quickly but said nothing was expected in
the coming days.
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